2. Graph the supply and demand of a good that is both produced domestically and imported. Assume that the country is not large enough to affect the world price. Illustrate the effects of a tariff on imports. Discuss the following: a. Income distribution effects b. Resource allocation effects c. Domestic production and consumption effects d. Government revenue effects e. Price of the good effects

2. Graph the supply and demand of a good that is both produced domestically and imported. Assume that the country is not large enough to affect the world price. Illustrate the effects of a tariff on imports. Discuss the following: a. Income distribution effects b. Resource allocation effects c. Domestic production and consumption effects d. Government revenue effects e. Price of the good effects

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The minister for labor of the Utopia (small country) is eager to encourage domestic production of bikes. A small bike industry exists, but only a few producers can survive foreign competition without government help. The country decided to help the local producers, the problem is the country has no idea what to do, some argues for 20% tariff and others thought 20% subsidy can gain same benefits to the country with less social cost. a. Show the following diagrammatically: The effects of the tariff on domestic bike output and consumption. The beneficial side effects of the tariff. The net gains or losses for the country. 4. All the same effects for the case of the production subsidy. 5. The differences in the effects of the two alternatives on the government’s budget. b. Can you describe a policy that captures the alleged benefits of worker training better than either the 20% tariff or the 20% subsidy?
The figure provided shows the Canadian domestic market for calculators. Price of calculators $450 40 30 20 25 10 S world price with tariff world price Fore 50 100 200 300 400 500 600 700 800 900 Quantity of calculators If the world price is $5 and an import quota of 600 is imposed, the price after the quota, in numerals, is
4. Effects of a tariff on international trade The following graph shows the domestic supply of and demand for wheat in New Zealand. The world price (Pw) of wheat is $255 per bushel and is represented by the horizontal black line. Throughout the question, assume that the amount demanded by any one country does not affect the world price of wheat and that there are no transportation or transaction costs associated with international trade in wheat. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. PRICE (Dollars per bushel) 480 Domestic Demand 455 430 405 380 355 330 305 280 255 230 0 " 30 Domestic Supply 60 90 120 150 180 210 QUANTITY (Bushels of wheat) ++ PW 240 270 300 ?
In the domestic market with no trade, the equilibrium price is _____ and the quantity traded is ____ units a. $90, 1,150 b. $60, 650 c. $60, 1,150 d. $40, 1,800
. Identify people and organizations that benefit from and suffer because of the tariff (2 points). Include how the tariff will impact your compan
Refer to the graph below of a large country that has imposed a tarifft on this good. The terms-of-trade gain for this country is , and the deadweight loss suffered by this country is Price $36 $30 $26 Home market S D 20 40 80 100 Quantity Price World market 40 80 Imports
37)When a small country imposes an import tariff, world prices fall because less is demanded. Select one: True False Explain this now
4. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of limes in Guatemala. The world price (Pw) of limes is $790 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of limes and that there are no transportation or transaction costs associated with international trade in limes. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. PRICE (Dollars per ton) 1110 1070 1030 990 950 910 870 830 790 750 710 0 Domestic Demand 40 25 1 1 80 Domestic Supply 120 160 200 240 280 QUANTITY (Tons of limes) I 1 Pw 320 380 400 (?)
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Which Americans benefit from the tariff? Why? Describe why the imposition of a tariff creates a deadweight loss.
Lesson 12 Question 1
If a country removes a tariff on imported shoes, we expect the domestic price of shoes to and the number of shoes consumed in the domestic market to a. fall; fall b. fall; rise c. rise; fall d. rise: rise